S&P slices VEON

S&P said it cut the ratings on VEON Ltd. and almost all its subsidiaries to CCC+ from BB+ and placed the ratings on CreditWatch with negative implications. The agency lowered VEON’s subsidiary PJSC VimpelCom rating to CCC- and placed the rating on watch. VimpelCom has RUB 35 billion in 8.85% bonds due Monday.

“VEON's credit quality materially deteriorated because of the conflict between Russia and Ukraine, but the company has sufficient liquidity to maintain operations in the next 12 months. The downgrade of VEON reflects heightened sovereign, country, and operational risk. The imposition of sanctions and capital controls, limiting the flows of capital and telecom equipment, will constrain VEON's ability to operate in both countries, particularly in Russia,” S&P said in a press release.

The agency also noted VEON faces increasing refinancing risks because of its significant exposure to Russia.

The negative watch indicates another possible downgrade in the coming weeks, S&P warned.

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